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Agriculture and Economic Growth: Conceptual Issues and the Kenyan Experience

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  • Block, Steven
  • Timmer, C Peter

Abstract

This report examines the role of agriculture in economic growth. The particular focus of our empirical analysis is on Kenya, though the report also adds to the existing literature by providing a new conceptual model of agriculture's role in the economic growth of poor countries. Based on the econometric simulation model developed in this study, the economic growth multiplier associated with additional agricultural income in Kenya is nearly three times the magnitude of the growth multiplier for non-agriculture. A dollar of agricultural income generates an additional $0.63 of income outside of agriculture, while a dollar of non-agricultural income generates only $0.23 of income outside of non-agriculture. This and related simulations suggest that economic growth strategies for countries like Kenya should give high priority to supporting the agricultural sector. The conceptual model presented in this study argues that agricultural productivity in particular has beneficial spillover effects for non-agricultural productivity. Previous studies have concentrated on market-based inter-sectoral linkages as the source of agriculture's contribution to economic growth. The present study adds a short list of non-market based inter-sectoral linkages through which agriculture contributes indirectly to economic growth. These linkages arise from governmental learning by doing, increased economic stability, food security, and the relative efficiency of rural household decision-making. Preliminary tests of this model for Kenya indicate that agricultural productivity contributes significantly to non-agricultural productivity.
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Suggested Citation

  • Block, Steven & Timmer, C Peter, 1994. "Agriculture and Economic Growth: Conceptual Issues and the Kenyan Experience," Harvard Institute for International Development (HIID) Papers 294430, Harvard University, Kennedy School of Government.
    • Handle: RePEc:ags:hariid:294430
    DOI: 10.22004/ag.econ.294430
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    Cited by:

    1. Oyakhilomen, Oyinbo & Zibah, Rekwot Grace, 2014. "Agricultural Production and Economic Growth in Nigeria: Implication for Rural Poverty Alleviation," Quarterly Journal of International Agriculture, Humboldt-Universitaat zu Berlin, vol. 53(3), pages 1-17, August.
    2. Kibaara, Betty & Ariga, Joshua & Olwande, John & Jayne, Thom S., 2008. "Trends in Kenyan Agricultural Productivity: 1997-2007," Working Papers 202611, Egerton University, Tegemeo Institute of Agricultural Policy and Development.
    3. Fakhri J. Hasanov & Elchin Suleymanov & Heyran Aliyeva & Hezi Eynalov & Sa'd Shannak, 2022. "What Drives the Agricultural Growth in Azerbaijan? Insights from Autometrics with Super Saturation," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 70(3), pages 147-174.
    4. Idsardi, E.F. & Schalkwyk, H.D. & Viviers, W., 2015. "The Agricultural Product Space: Prospects for South Africa," 2015 Conference, August 9-14, 2015, Milan, Italy 211752, International Association of Agricultural Economists.
    5. Ministry of Agriculture (Liberia), 2007. "Comprehensive Assessment of the Agriculture Sector in Liberia : Volume 1, Synthesis Report," World Bank Publications - Reports 7677, The World Bank Group.
    6. Debesh Mishra & Kamalakanta Muduli & Rakesh Raut & Balkrishna Eknath Narkhede & Himanshu Shee & Sujoy Kumar Jana, 2023. "Challenges Facing Artificial Intelligence Adoption during COVID-19 Pandemic: An Investigation into the Agriculture and Agri-Food Supply Chain in India," Sustainability, MDPI, vol. 15(8), pages 1-25, April.
    7. World Bank, 2003. "Kenya : A Policy Agenda to Restore Growth," World Bank Publications - Reports 14363, The World Bank Group.
    8. Hasanov, Fakhri J. & Shannak, Sa'd, 2020. "Electricity incentives for agriculture in Saudi Arabia. Is that relevant to remove them?," Energy Policy, Elsevier, vol. 144(C).
    9. Eicher, Carl K. & Rukuni, Mandivamba, 1996. "Reflections On Agrarian Reform And Capacity Building In South Africa," Staff Paper Series 11703, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    10. Debesh Mishra & Biswajit Mohapatra & Abhaya Sanatan Satpathy & Kamalakanta Muduli & Binayak Mishra & Swagatika Mishra & Upma Paliwal, 2024. "The pandemic COVID-19 and associated challenges with implementation of artificial intelligence (AI) in Indian agriculture," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 15(6), pages 2715-2729, June.
    11. Christian K.M. Kingombe, 2012. "The Linkage between Outcome Differences in Cotton Production and Rural Roads Improvements - A Matching Approach," IHEID Working Papers 12-2012, Economics Section, The Graduate Institute of International Studies.
    12. Timmer, C. Peter, 1995. "Getting agriculture moving: do markets provide the right signals?," Food Policy, Elsevier, vol. 20(5), pages 455-472, October.
    13. Nin Pratt, Alejandro & Diao, Xinshen, 2008. "Exploring Growth Linkages and Market Opportunities for Agriculture in Southern Africa," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 23, pages 104-137.
    14. Christophe Kasigwa Masumbuko & Mwambusa Ct Makuta & Niranda Ntamwira, 2012. "Enquete socio-économique dans les bassins de productionagricole du PIRAM dans la Province du Manièma en RD CONGO. Décembre 2012," Working Papers hal-00871281, HAL.

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